Marco Rubio, Bill Nelson pushing for caps on flood insurance premiums

Begonia Street in Everglades City is filled with flood water Tuesday evening, June 6, 2017, as the remnants of Tropical Storm Beatriz continues to move through Southwest Florida.(Photo: Sam Ogozalek/Naples Daily News)

WASHINGTON - Both of Florida’s senators are getting behind a bipartisan effort to overhaul the National Flood Insurance Program by capping premium increases, using advanced radar to make more accurate flood maps, and offering some homeowners vouchers to pay for coverage and loans to elevate buildings.

The bill, sponsored by senators on two key committees and from states that rely heavily on the program, is one of several proposals pending this year for revising rules for insurance purchased by 5 million homes and businesses. A House committee is scheduled Wednesday to consider seven bills addressing different aspects of the program.

“This bill helps ensure long-term stability, while providing much needed reforms to protect the program’s policyholders,” said Sen. Marco Rubio, R-Fla., who introduced the measure with lawmakers from several coastal states where the risk of flooding is greatest. “It is past time for the federal government to take a more proactive approach in addressing the underlying risk affecting flood prone communities.”

No state has more at stake than Florida. About 1.8 million of the nearly 5 million homes and businesses covered by the NFIP around the country are in the Sunshine State. Texas is second, with 605,845 properties in the program.

Despite having the most policyholders by far, Florida’s use of the program has been relatively modest in recent years.

The flood program was intended to be self-sustaining but ran up $25 billion in debts that it cannot repay responding to catastrophic storms, including Hurricane Katrina in 2005 and Superstorm Sandy in 2012. The legal authorization for the Federal Emergency Management Agency to sell coverage expires on Sept. 30, and home sales in flood plains would be disrupted if Congress does not act.

The bill unveiled Tuesday would cap annual premium increases at 10 percent, compared with the 25 percent maximum allowed in a 2014 law. Families whose insurance costs exceed a percentage of their income set in the bill would be eligible for vouchers, and the bill also would provide low- or no-interest loans for work such as home elevation that would mitigate the impact of future floods.

"This bill's about affordability," Louisiana GOP Sen. John Kennedy said at a Capitol Hill news conference. "It doesn't do any good to offer somebody insurance if they can't afford it."

To pay for the bill's new benefits, it would cap at 22 percent the commissions paid to insurance companies that sell and service policies but take no risk on coverage. About 31 percent of the premium dollars go to such payments now.

The bill also would suspend the practice of the FEMA paying $400 million annually to the federal treasury as interest for loans for past disaster response.

"Beyond the insanity of having the federal government charge itself interest, we’re robbing Peter to pay Paul," New Jersey Democrat Robert Menendez said.

Kennedy also said the bill builds on the experiences of victims of past storms, taking aim at contractors who intentionally pay policyholders less than they are due and law firms that prolong appeals to increase billable hours.

"There’s some really bad actors," he said. "Lawyers, engineers and others. This bill is going to give the head of FEMA the authority to call them up and say, ‘You’re fired.’ ”

The bill does not take steps to encourage more private insurers to get more involved in the market, a goal of several other plans being considered in the House Financial Services Committee and a feature of a bill proposed earlier this year by Louisiana’s other Republican senator, Bill Cassidy, with New York Democratic Sen. Kirsten Gillibrand.